A low-cost asset search; two ex-JP Morgan bankers accused of concealing trading losses; and Rafael Caro Quintero:

Although Caro Quintero was earlier sentenced to 40 years of prison for the heinous 1985 murder of DEA agent Enrique “Kiki” Camarena, a Mexico appellate court released Caro Quintero early. “Mexico seeks to detain recently released drug lord Rafael Caro Quintero” meanwhile, mentions that the Mexican attorney general issued a warrant for the provisional detention of Caro Quintero.  The attorney general did this in anticipation of a formal extradition request from the U.S.  I asked Donnie the former DEA agent to comment on these events and he said:

“Kiki and I went to the same high school and I knew his sisters well.  Kiki was one of the reasons I joined the DEA.  This situation is outrageous and Kiki’s murder should not have happened.  There will never be a closure.  I hope they extradite Caro Quintero to the U.S. and the Mexican Government soon opens its eyes.”

Link Chart: OFAC

Copyright 2013 Fred L. Abrams

Hiding assets via jewelry or other portable valuable commodities and former Turks & Caicos premier Michael Misick:

  1. On the trail of Michael Mastro: how to flee the law when you are 87” is about Michael & Linda Mastro.  These two might have secretly transferred bankruptcy estate assets by shipping a Range Rover full of jewelry, (i.e. portable valuable commodities), to Lisbon.  The post “Secreting Assets Without A Border Trace” similarly describes the fact pattern of a Ponzi schemer who had conceivably concealed diamonds by traveling as an airline passenger from the U.S. to Zurich, Switzerland.
  2. The April 21, 2012 Asset Search News Roundup states that former Turks & Caicos premier Michael Misick was the subject of an arrest warrant, reportedly over alleged corruption and supposed money laundering.  This past June 30th, the Turks & Caicos Weekly News published “Mike Misick Fighting Extradition.”   It discusses Misick’s April 13, 2013 re-arrest in Brazil and the effort to extradite him to the Turks & Caicos Islands.

Copyright 2013 Fred L. Abrams

The money laundering investigation at the Vatican Bank and options for U.S. taxpayers who have hidden their assets offshore:

Chart: The Internal Revenue Service

Copyright 2013 Fred L. Abrams

International asset recovery and suspected trade-based money laundering:

  1. As Britain a safe haven for plundered assets – experts stated, “successful international asset recovery is notoriously difficult because of the often complex web of financial transactions used to hide illegal sources of money, as well as a lack of cooperation between different countries…”  This article too cited the World Bank and UN Office of Drugs and Crime for the proposition that “[b]etween 1994 and 2009, only $5 billion of stolen assets were recovered globally — less than 2 percent of the lowest estimated amount stolen annually...”
  2. Four Columbian nationals, (one of whom is also an Israeli citizen), were indicted on July 9th, for their suspected involvement in a laundering circuit that washed illicit drug proceeds.  Three of the indicted four, were also separately named as Specially Designated Narcotics Traffickers under the Kingpin Act which has the effect of freezing any of their assets under U.S. jurisdiction.  In connection with the designation, U.S. authorities published a chart depicting trade-based money laundering reportedly carried out by way of offshore banks and companies:

(Click On The Chart To Enlarge) 

Link Chart: U.S. Treasury’s Office of Foreign Assets Control
Copyright 2013 Fred L. Abrams

 

Liberty Reserve’s red flags, a new Swiss bill and letters rogatory:

  1. Liberty Reserve’s money laundering spotted in 2009” reports the Costa Rican Financial Intelligence Unit had investigated Liberty Reserve because of  red flags.  This article too mentions that the Financial Intelligence Unit had turned the Liberty Reserve investigation over to Costa Rican prosecutors.
  2. Swiss government peels back bank secrecy rules” is about the Swiss bill, the Federal Act on Measures to Facilitate the Resolution of the Tax Dispute between Swiss Banks and the United States.  A May 29, 2013 Swiss Federal Council press release¹ discusses the bill.  The bill should ultimately help U.S. authorities identify Swiss bank customers pursuant to U.S.-Swiss double taxation agreements.
  3. Letters Rogatory, (a.k.a Judicial Assistance Requests), are sometimes needed in order to search for assets hidden offshore.  By employing a letter rogatory, evidence may be elicited from foreign bank witnesses.  The March 18, 2013 Order at In Re Application of Anton Stoeckl, U.S. District Court, S.D.N.Y., Index No. 12-cv-414, however, focuses on one letter rogatory the Court refused to execute.

¹May 29, 2013 press release courtesy of The Swiss Federal Administration.

Copyright 2013 Fred L. Abrams

This Asset Search News Roundup discusses the Secrecy for Sale Project and the indictment of a NY attorney along with a Swiss banker:

I)  The US-based  International Consortium of Investigative Journalists, (“ICIJ”), analyzed more than 2.5 million documents in its Secrecy for Sale Project.  The Project began after the ICIJ received a computer hard drive in the mail, which contained the so-called leaked documents.  The Project’s goal was to uncover money launderers, tax cheats, kleptocrats and anyone else with assets hidden offshore.

The Project detected secret foreign bank accounts or other assets allegedly maintained by individuals ranging from American doctors and dentists to Bayartsogt Sangajav, the deputy speaker of Mongolia’s Parliament.  Among other things, the Project investigated a nominee incorporation service known as the Portcullis TrustNet Group.  According to the Project’s webpages, the overall investigation was carried out through link charts generated by NUIX computer software, data mining and “old fashioned shoe leather reporting“.

II)  Hiding Assets Through Gatekeepers With Accounts Across The Globe highlighted the problem of lawyers, accountants, etc., who orchestrated asset concealment schemes.  One such case may involve New York attorney Edgar Paltzer and Swiss banker Stefan Buck.  A press release asserts that the two supposedly employed Swiss bank accounts as part of a conspiracy to hide millions from the IRS.  They were indicted on April 16th in U.S.A. v. Paltzer, et  al., U.S. District Court, S.D.N.Y., Index No. 13-cr-00282.

Copyright 2013 Fred L. Abrams

A whistleblower claim against Deutsche Bank and HSBC’s settlement with U.S. Treasury:

  • At “Human Intelligence & The SEC’s Whistleblower Program”, Labaton & Sucharow partner Jordan A. Thomas examines the critical role whistleblower tips will have in the SEC’s detection of fraudsters / recovery of assets.  One example of the foregoing might be the whistleblower tip of former Deutsche Bank risk analyst, Dr. Eric Ben-Artzi.  Mr. Thomas represents Ben-Artzi and a press release reveals that Ben-Artzi claims there were multi-billion dollar securities law violations at Deutsche Bank.  The article “Did Deutsche Bank Fraudulently Hide Huge Losses?“, also reports on Ben-Artzi’s SEC whistleblower tip.
  • The U.S. Treasury Department announced its largest collective settlement ever, $875 million dollars to be paid by HSBC, which has approximately $194 billion in assets and 300 branches.   This settlement resolves charges that HSBC had lapses in its anti-money laundering program and failed to place controls on foreign correspondent accounts.  An assessment of civil damages outlines the charges that were leveled against HSBC:
(Click On The Image To Read The Entire Assessment of Damages)

Copyright 2012 Fred L. Abrams

This Asset Search News Roundup reports on Michael and Linda Mastro’s supposed concealment of two diamond rings-

The October 25, 2012 indictment of Michael Mastro and his wife Linda, alleges violations of money laundering and bankruptcy fraud laws.  Among other things, the indictment accuses the Mastros of fraudulently hiding portable valuable commodities, such as a platinum ring with a 27.80 carat pear shape diamond and one 14 karat white gold ring with a 15.93 carat round diamond.

These rings might have been parked offshore, as suggested by “Mastros’ $1.4M diamonds now reportedly in France.”  According to page 15, ¶44 of the October 25th indictment, Linda Mastro falsely testified during her March 24, 2010 deposition, about the whereabouts of the rings.  At the deposition, Linda Mastro stated she brought the rings to Italy on or about November 2009.  As page 33, lines 15-25 of the deposition transcript show, Linda Mastro too asserted she could not recall if she left the rings in Italy:

(Click Above To Read The Entire Deposition Transcript)

Copyright 2012 Fred L. Abrams

Recovering corruption proceeds and related issues:

  1. At a news release, the Organisation for Economic Co-operation and Development notes that in twelve years, French authorities had just five convictions in cases arising out of the bribery of foreign officials.  The news release claims that French authorities have a “lacklustre response” to cases involving actual or alleged foreign bribery.
  2. The Role of Financial Intelligence Units in Fighting Corruption and Recovering Stolen Assets is a white paper provided by The Egmont Group of financial intelligence units.  It mentions how government authorities may detect corruption proceeds because  of tips / suspicious activity reports, supplied by financial institutions.  Page 13 of the paper reveals how illicit assets from a politician’s extortion scheme were uncovered as a result of suspicious activity reports, (i.e “SARs”), generated by three  banks:

 

Copyright 2012 Fred L. Abrams

The name of a whistleblower is reportedly leaked and concealing assets in Luxembourg:

  • press release and “Ex-IRS examiner charged with naming whistleblower ” refer to the criminal complaint against Dennis Lerner of Edgewater, N.J.  Mr. Lerner is accused of violating 26 U.S.C. § 7213 (Unauthorized disclosure of information), 18 U.S.C. §§ 207 (Restrictions on former officers, employees, etc.) & 208 (Acts affecting a personal financial interest).  The Court’s docket report reveals that Mr. Lerner was arrested and would be released from custody by way of a $300,000 personal recognizance bond.
  • As a haven for concealing assets, Luxembourg has few rivals.  Some of Bernard Madoff’s Ponzi scheme proceeds or other assets were hidden in Luxembourg.  The ex-president of Guatemala, Alfonso Portillo, is thought to have similarly laundered corruption proceeds through offshore accounts in Luxembourg and elsewhere.  Former Manhattan District Attorney Robert M. Morgenthau also mentioned Luxembourg at his  May 5, 2012 op-ed piece.  At the piece, Mr. Morgenthau too stated: “When I was the Manhattan district attorney, we learned of offshore accounts only through whistle-blowers, cooperators and serendipity.”

Copyright 2012 Fred L. Abrams